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Are you a spender or a saver? The differences between the two can be profound. Savers can be obsessed with their nest egg and will go to great lengths to continue padding it, whether that means skipping vacations, forgoing a night on the town, or living well below their means. On the other hand, Spenders can believe that there’s little point in working if you can’t enjoy the fruits of your labor. Why deny yourself a fancy car or luxury vacation if you have the money to pay for it? Let’s talk about spenders vs savers and how to save financially, making sound decisions, and being aware could change your future!

Financial planning questions

There’s no right or wrong approach to life.

Savers have a greater likelihood of accumulating wealth and being financially secure in the future. However, there’s more to life than the balance of one’s bank account. Spenders may not be securing their future, but they are enjoying the present. A perfect balance is what is required, but you must know how to save financially, and also how to budget!

What is the difference between savers vs spenders? Upbringing plays a huge part. People who are raised in a family of diligent savers are more likely to be savers themselves. Those who grow up in households where the focus is placed on enjoying today rather than securing tomorrow are more likely to be spenders.

Cultural norms can also be a huge influence. For example, saving is the norm in countries like India, Vietnam, and China. That’s a different story in places like the United States, UK, and Greece, where there’s a greater emphasis on immediate consumption.

Many people say they don’t save because they can’t afford it. However, that thinking has been proven wrong in numerous studies. Psychologist and best-selling author Peter Collett talks and saving and the motivations behind it. He discusses studies conducted in the world’s poorest places, where people live on as little as $2 per day. Even in those locations, he said, people were managing to save for the future.

The problems with spending and saving come at the extremes. Those who limit themselves to the most extreme levels of frugality for the sake of saving may be missing an opportunity to enjoy the fruits of their labour. Those who live for the now and forego saving may be putting themselves in serious jeopardy.

A financial adviser can help spenders and savers find a better balance. A comprehensive financial plan can illustrate the necessary level of saving to reach one’s goals. The adviser can show a spender why they need to take saving seriously and how they adjust their lifestyle to do so. The adviser can also show an extreme saver that they’re well ahead of schedule and can use some of their resources to rewards themselves and their family.

There’s no right or wrong when it comes to saving or spending. The goal is to find the proper balance so you can enjoy the present while also securing the future. Knowing how to save financially, but to also not become obsessed by the goal is a perfect balance and something we should all implement!

About Mike Coady

Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.

Mike is an award-winning money coach and industry leader in the financial sector.

Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Founding Fellow of the Institute of Sales Professionals (FF.ISP), and a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.

To learn how to choose a great financial adviser, download our free guide.

Blog published by Mike Coady.